The third quarter forecast update demonstrates yet another marginal global downgrade to industry projections, indicative of persistent macroeconomic weakness and still shaky consumer sentiment as a result. Long-term untapped potential globally remains significant. However, structural changes that shape consumer demand, coupled with potential risks of recession and global downturn, signal the need to prepare for the headwinds in the short to medium term and assess strategies accordingly.
On the positive side, the global marketplace still offers significant unmet potential to secure long-term industry growth. However, the industry continues to face and will be facing going forward a number of challenges due to macroeconomic and political headwinds, shaky consumer sentiment, structural changes to consumer demand (especially in developing markets approaching saturation point and hence threats of commoditisation), pricing and competitive pressures.
Number of markets of interest to the industry, such as Brazil and Turkey for example, continue to show signs of weakness and yet another quarter of downgrade to projections. However, China still demonstrates signs of healthy demand and growth, also reflected in the third quarter upgrade to forecast projections.
Developing markets remain the key focus of attention for the industry, as key global players are seeking to reduce their dependence on slow-growing developed regions and tap into a vast unmet potential of the developing world. However, risks to growth over the next few years come from mounting talk of a US recession and global downturn, which would entail losses for the industry’s revenues. The downturn will likely undermine the industry’s focus on improved pricing and the premium segment as financial insecurities will force consumers to rein in spending.
With the talk of impending economic headwinds and resulting jittery consumer sentiment, current industry progression in premium innovation as well as price increases might become more problematic going forward, calling for further focus on cost efficiencies and careful examination of opportunities by market and product category to secure best ROI in anticipation of headwinds.
If you purchase a report that is updated in the next 60 days, we will send you the new edition and data extract FREE! Home Page